Escorts Kubota Limited

Industrials — Farm & Heavy Construction Machinery · NSE

₹2,750.00+₹23.40 (+0.86%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by moderate debt load, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Escorts Kubota Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Escorts Kubota Limited manufactures and sells agricultural and construction equipment in India and internationally.

IndustryFarm & Heavy Construction Machinery

SectorIndustrials

Employees4,323

Annual revenue₹11,414 Cr

How does it make money?

Turns over ₹11,414 Cr a year. Of every ₹100 of sales, about ₹21 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 4,323 employees supports ₹2.64 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin16.2%

Net margin21.0%

Revenue / employee₹2.64 Cr

Who are its competitors?

The closest listed comparisons in its industry are MAHINDRA & MAHINDRA LTD, ASHOK LEYLAND LTD, TATA MOTORS LIMITED, LARSEN & TOUBRO LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

MAHINDRA & MAHINDRA LTDP/E 17.8x · ROE 19.7%

ASHOK LEYLAND LTDP/E 25.2x · ROE 24.4%

TATA MOTORS LIMITEDP/E 37.1x · ROE 32.8%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

What is its competitive advantage?Little sign of one

Returns on capital of 14.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE14.4%

ROE19.3%

Peer median ROE24.4%

What is the outlook?

15 analysts covering the stock expect revenue to grow about 8.1% and earnings to grow about 11.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+8.1%

Est. earnings growth+11.1%

Analysts15

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +38% while net margin moved +173% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+38%

Margin effect+173%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

• ROCE of 14.4% is adequate but not distinctive
✓ ROCE has improved by 4.3 points over the period — returns are strengthening
• EBITDA margin of 16.2% is respectable
• Net margin of 11.3% is reasonable
• Revenue has compounded at 11.3% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

73/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

73/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

21.9x

3Y Median

34.0x

40 monthly readings · mean 37.6x · range 12.5x–71.0x

Sector Median

27.6x

median of 4 sector peers

🟢Current valuation is approximately 36% below its 3y median of 34.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 21% below the peer median of 27.6x.

vs. its own history

Cheap

34.0x median over 40 months · -36%

vs. sector peers

Cheap

27.6x median of 4 peers · -21%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

21.9x

P/B

2.49x

EV/EBITDA

16.3x

PEG

0.39

Dividend Yield

1.20%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 12.2% to 16.2% over 3 years.
Cash generation is improving
Free cash flow is up 20678% over 3 years.
Return on equity is rising
ROE has improved from 7.8% to 19.3%.
Return on capital is rising
ROCE has improved from 10.1% to 14.4%.
Valuation below its historical average
At 21.9x the stock trades 36% below its own median of 34.0x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Debt is rising
Total debt is up 183% over 3 years — worth checking what it funded.

Red Flags

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 183% over 3 years, from ₹57 Cr to ₹162 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 12.2% to 16.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 36% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 21% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

No clear risk case emerges from the available numbers — which is not the same as there being none.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 8% a year✓ 11.3% CAGR
Latest reported year was 28.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 16.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹1,064 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 14.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹30,258 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

21.9x

Fair

Fairly valued against the generic band

P/B Ratio

2.49x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹125.66

Profitable

Profitable on a per-share basis

ROE

19.3%

Strong

Strong capital efficiency

ROCE

14.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.31x

Moderate

Moderate leverage

Revenue Growth (YoY)

28.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-72.4%

Falling

Profits are shrinking

Dividend Yield

1.20%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹1,064 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹2,750

P/E (Forward)

19.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.0%

Average

Average margins

Net Margin

11.3%

Good

Strong bottom-line conversion

Current Ratio

3.26

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

2757.5 / 2915.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹8,281 Cr	₹9,654 Cr	₹10,110 Cr	₹11,414 Cr	+11.3%
EBITDA	₹1,011 Cr	₹1,369 Cr	₹1,405 Cr	₹1,855 Cr	+22.4%
EBITDA Margin	12.2%	14.2%	13.9%	16.2%	—
PAT (Net Profit)	₹637 Cr	₹1,077 Cr	₹1,265 Cr	₹2,394 Cr	+55.5%
EPS	₹58.76	₹97.93	₹114.98	₹217.55	+54.7%
ROE	7.8%	11.5%	12.2%	19.3%	—
ROCE	10.1%	13.4%	13.0%	14.4%	—
Total Debt	₹57 Cr	₹448 Cr	₹105 Cr	₹162 Cr	+41.4%
Free Cash Flow	₹5 Cr	₹505 Cr	₹747 Cr	₹1,064 Cr	+492.3%

🟢 Revenue has grown at 11.3% a year over 3 years.

🟢 EBITDA has grown at 22.4% a year over 3 years.

🟢 EBITDA Margin has risen from 12.2% to 16.2% over 3 years (+4.0 pts).

🟢 PAT (Net Profit) has grown at 55.5% a year over 3 years.

🟢 EPS has grown at 54.7% a year over 3 years.

🟢 ROE has risen from 7.8% to 19.3% over 3 years (+11.6 pts).

🟢 ROCE has risen from 10.1% to 14.4% over 3 years (+4.3 pts).

🔴 Total Debt has grown at 41.4% a year over 3 years.

🟢 Free Cash Flow has grown at 492.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹15,799 Cr

Total Liabilities

₹3,430 Cr

Total Debt

₹162 Cr

Cash & Equivalents

₹178 Cr

Operating Cash Flow

₹1,381 Cr

Capex

-₹317 Cr

Shareholding (proxy)

Institutional Holding

13.8%

Insider Holding

74.5%

Corporate Actions

Next Earnings

03 Nov 2026

Dividend Rate

₹33

Ex-Dividend Date

03 Jul 2026

Analyst Consensus

Recommendations

5 Buy · 10 Hold · 4 Sell

Target Price (Mean)

₹3,288.65

+19.6% vs CMP

Target Range

₹2,640 – ₹4,000

Peer Comparison

Company	P/E	ROE
MAHINDRA & MAHINDRA LTD	17.8x	19.7%
ASHOK LEYLAND LTD	25.2x	24.4%
TATA MOTORS LIMITED	37.1x	32.8%
LARSEN & TOUBRO LTD.	30.1x	15.2%

Recent News

1 positive1 negative4 general

ESCORTS Outlook for the Week

Equitypandit, 09 Oct

Dividend Dhamaka: Escorts Kubota Rewards Investors With 300% Dividend, Profit Jumps 9% | How To Get Eligible?

Goodreturns, 15 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Escorts Kubota Share Price Hits Fresh 52-Week Low Today

Univest, 01 Oct

Escorts Kubota Limited Announces Special Window for Transfer and Dematerialisation of Physical Securities

scanx.trade, 14 Oct

Escorts Kubota Share Price Falls over 3% After September Sales Slump 17% YoY

NDTV Profit, 01 OctResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Should You Be Adding Escorts Kubota (NSE:ESCORTS) To Your Watchlist Today?

Simply Wall Street, 30 May

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong13.2/20

🟢Financial HealthStrong13.5/20

🟢GrowthStrong16.1/20

🟢ProfitabilityStrong12/15

🟢ValuationAttractive10.7/15

🟢RiskLow7.2/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 8% a year11.3% CAGR
✓EBITDA margin holds above 14%16.2%
✓Free cash flow remains positive₹1,064 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 11%14.4%